Rockwell v. Humphrey

• Decision Date: 04 April 1883
• Citation: 57 Wis. 410,15 N.W. 394
• Parties: ROCKWELL v. HUMPHREY AND OTHERS.
• Court: Wisconsin Supreme Court

57 Wis. 410

15 N.W. 394

ROCKWELL

v.HUMPHREY AND OTHERS.

Supreme Court of Wisconsin.

Filed April 4, 1883.

Appeal from circuit court, Walworth county.

This action was brought to determine the interest of the plaintiff in the undivided one-half of an abstract under a written instrument hereinafter set forth, and to compel the defendant Humphrey to account for and pay over to the plaintiff a share of the use and profits thereof, and in default thereof that said half of the abstract be sold and the plaintiff paid out of the proceeds thereof, and for general relief. Curtis was made a defendant, and his interest alleged as subsequent mortgagee. The defendant Humphrey answered, denying any considerations for the written instrument, and set up a counter-claim. The defendant Curtis answered, setting up his mortgage and the debt thereby secured, and also the giving of a second mortgage by way of removal, January 16, 1879, and asked that his first chattel mortgage be declared a lien prior to said written instrument. The following facts are admitted or found by the court:

Le Grand Rockwell, father of the plaintiff, died in 1869, leaving him surviving, the plaintiff and two other children, and a widow, Frances Rockwell, who was married to the defendant Humphrey in the fall of 1872, who thereupon went to living with the widow on the Rockwell farm. The plaintiff, having received from his father's estate $1,000, he lent and advanced the same to the defendant Humphrey in February, 1874, and no part thereof, nor interest thereon, has ever been paid, as found by the court. The court further found, in effect, that in the fall of 1874 the defendant Humphrey bought of one Noyes the undivided one-half of a set of abstract-books of the public records of Walworth county, Wisconsin, for the sum of $3,000, and took a bill of sale therefor in his own name; that November 1, 1875, the defendant Humphrey executed and delivered to the plaintiff a written instrument, of which the following is a copy, to-wit:

“ELKHORN, WIS., November 1, 1875.

Received of Henry Rockwell $1,000, for the purpose of purchasing of C. A. Noyes, Jr., an undivided one-half interest in a set of abstract-books of the public records of real-estate transfers of Walworth county for the sum of $3,000 for said one-half interest; and in consideration of the $1,000 aforesaid, I hereby give and grant to said Rockwell an undivided one-third interest in the said one-half interest aforesaid, or in lieu thereof to pay to him the said sum of $1,000, and the interest thereon at the rate of 10 per cent. per annum until paid; the bill of sale bearing date October 27, 1874, and schedule of property so purchased hereunto attached.

B. B. HUMPHREY.”

It further appears, and is not disputed, that January 11, 1877, the defendant Humphrey executed and delivered to his brother-in-law, the defendant Curtis, a chattel mortgage on the undivided one-half interest of the abstract for the sum of $2,000, to whom he was then liable for that amount, and the same was duly filed with the clerk on that day. February 20, 1877, the wife of the defendant Humphrey, and the mother of the plaintiff, died. February 24, 1877, the plaintiff, with previous knowledge of the existence and filing of said Curtis mortgage, filed the written instrument so received by him from the defendant Humphrey in the clerk's office as a chattel mortgage; and February 5, 1879, renewed the same, by affidavit annexed thereto and filed with the clerk, and the court found there was due thereon $1,597.17. The court found there was due and unpaid on the Curtis mortgage $2,557.67; that the defendant Humphrey was the owner of the undivided one-half of the abstract at the time of giving said written instrument and said Curtis mortgage respectively, and was still such owner. The court found, as conclusions of law, that the written instrument, so taken by the plaintiff, was, in effect, a chattel mortgage, but subordinate and subject to the first Curtis mortgage, and ordered judgment against Humphrey, and in favor of the plaintiff and Curtis respectively, and judgment of foreclosure and sale of the Curtis mortgage pursuant to the findings, and that such judgments be respectively satisfied out of the proceeds of the sale in the order indicated. Judgment was, thereupon accordingly entered, from which the plaintiff brings this appeal.

Winsor & Sprague, for appellant, Henry Rockwell.

Smith & Wheeler and T. D. Weeks, for respondents, Benjamin B. Humphrey and others.

CASSODAY, J.

Whether a given written instrument constitutes a conditional sale, a conveyance, or a mortgage, is a question which has often perplexed the courts. When the language of the instrument is equivocal, the intention of the parties, as evinced by the whole transaction and the attending circumstances, seems to be the true criterion. Goodman v. Grierson, 2 Ball & Beatty, 278; Williams v. Owen, 5 Mylne & Craig, 306; Clark v. Henry, 2 Cow. 324; S. C. affirmed, 7 Johns. Ch. 43;Edrington v. Harper, 3 J. J. Marsh. 354;Hughes v. Sheaff, 19 Iowa, 343; Cornell v. Hall, 22 Mich. 377;Rich v. Doane, 35 Vt. 125;Pitts v. Cable, 44 Ill. 105. Thus, in Goodman v. Grierson, supra, Lord Chancellor MANNERS, in answer to the contention that the transaction could not be a mortgage because there was no bond collateral to the deed, nor any covenant to pay, said: “It is quite clear that if the intention were that it should be a mortgage, the absence of a covenant and collateral bond would not make it the less so. This was decided in King v. King, 3 P. Wms. 358, where Lord TALBOT said it did not vary the transaction, for that every mortgage implied a loan, and every loan implied a debt, for which the mortgagor's personal estate was liable; and although an action of covenant would not lie, still it might be a mortgage.” So Lord Chancellor TOTTENBOM, in Williams v. Owens, supra, said; “That this court will treat a transaction as a mortgage, although it was made so as to bear the appearance of an absolute sale, if it appear that the parties intended it to be a mortgage, is, no doubt, true; but it is equally clear that if the parties intended an absolute sale, a contemporaneous agreement for a repurchase, not acted upon, will not, of itself, entitle the vendor to redeem.”

In Edrington v. Harper, supra, Chief Justice ROBERTSON, of Kentucky, said: “It is often very difficult to discriminate between mortgages and conditional sales. Every case must be determined by a consideration of its own peculiar circumstances. The intention of the parties is the only true and infallible test; that intention is to be collected from the condition or conduct of the parties, as well as from the face of the written contract.” This was substantially adopted by the supreme court of Iowa in Hughes v. Sheaff, supra, where Chief Justice WRIGHT added: “And hence the court must take into consideration the price, the circumstances, all the antecedent facts, the situation of the parties, and from these determine the true nature of the transaction. These differ, as we know, as the names of the parties differ, and they so influence the determination in each case that it is next to impossible to deduce from them any general, safe, and comprehensive rule.” In Cornell v. Hall, supra, it was held by the supreme court of Michigan that “the only safe criterion in determining controversies arising out of such transactions is the intention of the parties, to be ascertained by considering their situation and the surrounding facts, as well as their writings.”

Where the language of the instrument is equivocal, and the relation of debtor and creditor is not created by the transaction and never existed, and the vendee takes and retains possession of the property, and its value is not perceptibly in excess of the consideration paid, and there is nothing to indicate an intent to transfer the property as a mere security, the transaction has usually been held to be a conditional sale. Goodman v. Grierson, supra; Williams v. Owens, supra; Perry v. Meadowcraft, 4 Beav. 197; Conway v. Alexander, 7 Cranch, 237;Holmes v. Grant, 8 Paige, 243;Baker v. Thrasher, 4 Denio, 493;Saxton v. Hitchcock, 47 Barb. 220;Hughes v. Sheaff, supra; Flagg v. Mann, 14 Pick. 467;Woodward v. Pickett, 8 Gray, 617;Rice v. Doane, supra; West v. Hendrix, 28 Ala. 226; Pearson v. Seay, 35 Ala. 612; Logwood v. Hussey, 60 Ala. 417; Ford v. Irwin, 18 Cal. 117;Henley v. Hotaling, 41 Cal. 22;Slowey v. McMurray, 27 Mo. 113;McNamara v. Culver, 22 Kan. 661; Hoopes v. Bailey, 28 Miss. 328;Smith v. Crosby, 47 Wis. 160; [S. C. 2 N. W. REP. 104.] But in several of these cases, as in McNamara v. Culver, it is held that “the test is the existence or non-existence of a debt. If, after the transaction, no debt remains, there is no mortgage, but only a conditional sale.”

On the other hand, when the relation of debtor and creditor is created by the transaction, or previously existed, and by express language or fair implication continues, and the possession is retained by the vendor, and the value of the property is greatly in excess of the consideration paid, the transaction has usually been held to be a mortgage. Clark v. Henry, supra; Roach v. Casine, 9 Wend. 227;Murray v. Walker, 31 N. Y. 399;Horn v. Ketteltas, 46 N. Y. 605;Carr v. Carr, 52 N. Y. 251;Russell v. Southard, 12 How. (U. S.) 139;Villa v. Roderiguez, 12 Wall. 323;Cornell v. Hall, supra; Cooper v. Brack, 41 Mich. 488;^a1Rice v. Rice, 4 Pick. 349;Eaton v. Green, 22 Pick. 526;Murphy v. Cooley, 1 Allen, 107;Gifford v. Ford, 5 Vt. 532;Blodgett v. Blodgett, 48 Vt. 32;Pearson v. Slay, 38 Ala. 643; Wilson v. Giddings, 28 Ohio St. 554;Plato v. Roe, 14 Wis. 453;Wilcox v. Bates, 26 Wis. 465;Ragan v. Simpson, 27 Wis. 355;Muscott v. Pumpelly, 46 Wis. 660;Stark v. Redfield, 52 Wis. 349; [S. C. 9 N. W. REP. 168.] In Russell v. Southard, supra, Mr. Justice CURTIS said: “The deed and memorandum certainly import a sale,” and yet from all the...